December 21, 2010 / 1:59 AM / 9 years ago

Factbox: Impact of U.S. Internet rules

(Reuters) - The Federal Communications Commission adopted Internet traffic rules on Tuesday that would ban Internet service providers from blocking or discriminating against traffic on their networks.

The rules, expected to come into effect early next year, will also allow high-speed Internet providers to charge customers according to their level of usage and would give wireless carriers additional network management freedoms.

Because the FCC tried to strike a balance between competing interests, the effects can cut more than one way and it may be some time before the full impact is apparent, even if the rules survive any court challenge.

Following are the likely impacts on various companies, consumers and the FCC based on reports from analysts and industry insiders.

INTERNET PROVIDERS

* Cable companies like Comcast Corp, Time Warner Cable, Cablevision Systems Corp and big landline providers like AT&T Inc and Verizon Communications Inc are banned from blocking or discriminating against lawful Internet content.

* The rules will not stand in the way of usage-based pricing, allowing cable and other fixed line companies that also serve as high-speed Internet providers to increase rates for subscribers that do bandwidth-heavy tasks.

* Cable subscribers considering dropping their TV service to watch television and movies online may think twice if new pricing schemes push up the cost of streaming content.

* Cable companies are better off than when the FCC was considering reclassifying broadband under the stricter regulatory regime of existing phone rules.

WIRELESS CARRIERS

* Verizon Wireless (joint venture of Verizon Communications and Vodafone Group Plc), AT&T, Sprint Nextel Corp, T-Mobile (U.S. unit of Deutsche Telekom AG) and others would be granted added flexibility under the rules, acknowledging tighter bandwidth-constraints.

* They would be subject to a looser version of the no-blocking policy — banning only the blocking of websites and competing voice and video services.

* Mobile broadband could still discriminate against bandwidth-heavy content.

* CTIA, the trade association for the wireless industry, continues to say the rules are unnecessary, but commended the FCC for recognizing the need to regulate mobile broadband differently from landline services.

CONTENT PROVIDERS

* Google Inc, Microsoft Corp, Amazon.com, Facebook, Netflix Inc and other content providers could lose some of the edge they were building over cable companies if downloading content becomes more expensive under usage-based pricing.

* On the other hand, Internet providers cannot block their services.

* Mobile broadband is not subject to as many network management restrictions as wireline services, creating fewer protections for mobile applications.

INTERNET USERS/CONSUMERS

* Public interest groups Free Press, Public Knowledge and Media Access Project all complained that the rules would give Internet providers too much power over Internet users.

* This is particularly worrisome, they said, for the poor and minorities who use their cell phones as a primary tool to access the Internet.

* But some industry analysts say the rules will prevent network congestion and allow companies to make sufficient money to invest in upgrading their networks.

* FCC Chairman Julius Genachowski said consumers would not see significant changes as the rules are intended to preserve the current openness of the Internet.

FCC

* Adopting the rules will complete a time-consuming rule-making that has been hanging over the agency’s head but many experts expect court challenges.

* But the rules have drawn critical attention from Republican lawmakers who will control the U.S. House of Representatives come January.

* Representative Greg Walden, the incoming chair of the House subcommittee on communications and technology, said he plans to look into every legislative option to reverse the rules and will hold a series of hearings early next year.

Compiled by Jasmin Melvin; Editing by Tim Dobbyn

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